What embargo? Turkish-made cars still arriving in Israel

New cars at Haifa Port  credit: Shutterstock
New cars at Haifa Port credit: Shutterstock

Vehicles worth some NIS 250 million manufactured in Turkey were delivered in Israel in May-June.

In early May, the Turkish government imposed an embargo on exports to Israel, including vehicles manufactured in Turkey. Recent figures show, however, that the embargo is not effective.

According to Ministry of Transport vehicle delivery figures released this week, in the period May-June 2024, 2,847 private and commercial vehicles manufacture in Turkey were delivered in Israel, worth approximately NIS 250 million (on the basis of list price). Most of these were imported before the embargo began, but it appears that imports have not entirely stopped.

This week, it was reported in Turkish media that a sharp and unexplained rise in Turkish exports to Greece had occurred in May, amounting to $150 million. The assessment in Turkey is that the rise stems from a trade channel circumventing the embargo, from Turkey to Greece and thence to Israel. The goods in question include motor vehicles. The Turkish investigation found that goods bound for Israel were being exported from Turkey to other countries with documents stating that the final destination is a third country, and that from those countries they are re-exported with new documents.

According to Central Bureau of Statistics figures for May, imports of vehicles and vehicle parts from Turkey fell sharply to $14.2 million from $40.2 million in May 2023. It is estimated however that some of the missing imports will appear in the June figures, which have yet to be published, or that they were diverted through other countries, and the bills of lading bear the names of those countries.

Jump in deliveries of Chinese vehicles

It appears that the indifference of the local vehicle market to geopolitical developments in the wake of the Swords of Iron war does not just apply to Turkey. According to the vehicle delivery figures, in the first half of this year deliveries of vehicles manufactured in China were 16.8% higher than in the first half of 2023. Chinese-made vehicles accounted for 22.3% of all vehicle deliveries in Israel, the highest proportion for any Western country. For the sake of comparison, in the European Union the market share of Chinese vehicles was less than 4.5% in the period January to May.

In the electric vehicle segment in Israel, Chinese brands accounted for 65% of all deliveries in the first half year, again the highest proportion among the developed countries. This month, figures for exports of Chinese electric vehicles to the European Union were published in China. It turns out that sales of some Chinese brands in Israel are tens and even hundreds of percentage points higher than in all the European Union countries combined.

"Self-registrations" peak

Altogether, 155,000 new vehicles were delivered in Israel in the first half of this year, 11% fewer than in the same period last year. The assessment in the sector is that in June, when 26,000 vehicles were delivered, which is 5% more than in June last year, more than 4,00 of the deliveries were "self registered", that is, vehicles that importers have had to register in their own names after failing to sell them within a year of their manufacture, plus a three-month extension because of the war. These are record numbers for self registration, leading to a substantial increase in the supply of vehicles on the "zero kilometer" track, that is, vehicles with a previous owner (the importer) that have not clocked up any kilometers travelled.

Published by Globes, Israel business news - en.globes.co.il - on July 4, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

New cars at Haifa Port  credit: Shutterstock
New cars at Haifa Port credit: Shutterstock
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